Canberra not-for-profit organisation Mental Health Australia won its case and was awarded costs against the ACT Long Service Leave Authority after the Supreme Court found the charity had been denied procedural fairness.
The organisation had been forced to take its case to court after receiving what it described as "bad advice and mixed messages" from the authority over a registration issue.
The ACT government authority administers a portable long service scheme which allows employees or subcontractors to work for different employers within various job sectors such as construction, cleaning, security and community service, but still accrue a long service leave entitlement.
Mental Health Australia had been part of the ACT scheme for many years until 2016, when the authority advised that it was no longer eligible and would be de-registered from January 1, 2017.
However, the authority then abruptly reversed its decision, claiming the charity was determined to be an employer within the community sector under the definition of the legislation and was therefore required to re-register. With the re-registration came a demand for back-payment of entitlements.
There was no review process offered and Mental Health Australia, the Canberra-based peak policy body for mental health organisations, stood to lose around $250,000 as a result of the authority's demand.
The registered charity body, which has been based in the ACT for around 20 years and employs around 19 part-time and full-time employees, is one of 23 not-for-profits funded through the federal government's Health Peak and Advisory Bodies program.
It acts as a policy body and advocate for a number of organisations including Beyond Blue, Lifeline, The Royal Flying Doctor Service and the Black Dog Institute.
Mental Health Australia's chief executive Frank Quinlan had expressed frustration at the need to go to court at all over the issue when it could have easily been resolved by the responsible minister "at the stroke of a pen".
Justice Verity McWilliam found that the charity had "suffered the injustice of not knowing there was any ongoing issue about its registration" and that the legislation required "that procedural fairness be given at the initial stage of decision-making".
"The lack of such knowledge resulted in no opportunity to put submissions or other material to the authority," she said.
She also found that the authority's decision to require the charity to re-register was based on an error of law.
"It can be seen that MHA does not provide any service directly to individuals in need of mental health and welfare assistance," she said.
"Rather, it represents those organisations who are 'at the coalface'."